Organizations Excluded from $20 Billion in EPA Funds Worry About Bankruptcy
Nonprofits are facing challenges in meeting payroll for their employees as the EPA seeks to recover funds from the Inflation Reduction Act.
TroibNews 
Eight nonprofits entangled in a legal dispute over $20 billion in climate grants from the Biden administration are facing a critical funding crisis.
Since February 18, these organizations have been locked out of their accounts at Citibank due to an unexplained freeze, which has arisen amid criticism from the Trump administration.
As of Tuesday, the situation has escalated, with the nonprofits now lacking the grant money necessary for vital expenses such as payroll and rent.
This standoff is part of the broader consequences stemming from the Trump administration’s attempt to reclaim billions from former President Biden’s comprehensive climate and clean energy initiatives. This includes funds that had already been legally contracted to agencies and deposited in bank accounts for the organizations to use. Recently, a senior federal prosecutor resigned, alleging that Justice Department officials pressured her to initiate a criminal investigation into the $20 billion in Environmental Protection Agency climate grants despite the absence of wrongdoing evidence.
The $20 billion originates from the Greenhouse Gas Reduction Fund, a program designed to enhance clean energy technology financing in low-income communities.
EPA Administrator Lee Zeldin has accused the program of being a vehicle for federal agencies to “shovel boat loads of cash to far-left activist groups,” while the agency faces scrutiny over its legal authority to withhold grant money without substantiated fraud claims.
Of the eight grant recipients, five confirmed to PMG's E&E News on Friday that they remain unable to access the balance of their grants stored at Citibank, with no explanation from either the bank or the Trump administration. The remaining three organizations did not respond to inquiries but are presumed to be experiencing similar issues.
One awardee conveyed to E&E News that without access to funds, it cannot meet payroll obligations and anticipates defaulting on contracts with project partners by March 7 as it seeks to raise funds to cover expenses.
While other recipients—particularly established nonprofits with more resources—can temporarily manage their fundamental costs, all five groups indicated that an extended funding freeze could result in bankruptcies and defaults.
These nonprofits utilize the Greenhouse Gas Reduction Fund money, established by Biden’s Inflation Reduction Act, to provide loans for initiatives like solar panel installations and electric buses. However, some of their borrowers are halting projects or reevaluating their involvement, concerned that the grantees may not fulfill their lending commitments.
"Our borrowers need to be able to access funds to be able to move these projects forward, and that hangs in the balance right now if this continues,” said an official for one of the awardees, who requested anonymity due to fears of retaliation.
The EPA did not respond to requests for comment.
The head of one grant recipient, the coalition of nonprofits known as Power Forward Communities, expressed confidence in deploying its initial $539 million disbursement and believes that Citibank will honor the funding agreements. Citibank has yet to comment.
According to Citibank's contract with the recipients, the bank cannot freeze accounts for more than 48 hours unless the EPA initiates the procedure to reclaim exclusive control, which is permissible solely in cases involving fraud, according to several awardees.
On Tuesday, Zeldin stated on Fox Business that retrieving the funds is "now being worked through between the Justice Department and Citibank."
The Washington Post reported that the FBI has interrogated EPA employees regarding the Greenhouse Gas Reduction Fund programs. However, the publication noted challenges faced by the office of Acting Deputy Attorney General Emil Bove in finding a career prosecutor willing to request a warrant for the funds. A U.S. magistrate judge in the District of Columbia reportedly denied one request for a seizure warrant.
The Department of Justice did not respond to inquiries.
Several awardees contend that only a lawsuit would compel Citibank to clarify its legal justification for withholding the funds, yet they remain hesitant to take legal action due to previous positive interactions with the bank.
On Wednesday, Democratic California Attorney General Rob Bonta dispatched a letter to Citibank urging the release of the funds, as reported by two awardees. His office has not provided a response. Awardees anticipate that other Democratic attorneys general and governors will follow suit with letters of their own shortly.
In addition, awardees are reaching out to allies in Congress, including Republicans whose constituents stand to benefit from the investments under the program. Analyses indicate that more funding has flowed to red states and districts compared to blue ones.
Last week, the bipartisan National Governors Association proposed a resolution calling for “ensuring the federal government meets its already committed obligations for federally funded projects across states, territories and Commonwealths.”
Awardees have expressed that the uncertainty regarding Citibank’s hold on the funds complicates pursuing legal recourse. "It’s hard to know what the legal options are when we don’t know what actions were taken,” commented an official for one awardee.
Some awardees are contemplating legal action against the bank, aiming to prompt it to release the funds and disclose its interactions with the EPA and Justice Department.
Others prefer to remain passive for the moment. Zeldin and some Republican lawmakers have primarily targeted the three recipients of a segment of the $20 billion program, specifically the $14 billion National Clean Investment Fund. Meanwhile, awardees under a smaller initiative intended for nonprofit lenders serving low-income communities are wary of attracting attention.
“We’ve been operating in a gray zone,” remarked an official for one of these organizations. “We haven’t been targeted and [are] trying to keep a low profile.”
Tim Cama contributed to this report.
Debra A Smith contributed to this report for TROIB News
Since February 18, these organizations have been locked out of their accounts at Citibank due to an unexplained freeze, which has arisen amid criticism from the Trump administration.
As of Tuesday, the situation has escalated, with the nonprofits now lacking the grant money necessary for vital expenses such as payroll and rent.
This standoff is part of the broader consequences stemming from the Trump administration’s attempt to reclaim billions from former President Biden’s comprehensive climate and clean energy initiatives. This includes funds that had already been legally contracted to agencies and deposited in bank accounts for the organizations to use. Recently, a senior federal prosecutor resigned, alleging that Justice Department officials pressured her to initiate a criminal investigation into the $20 billion in Environmental Protection Agency climate grants despite the absence of wrongdoing evidence.
The $20 billion originates from the Greenhouse Gas Reduction Fund, a program designed to enhance clean energy technology financing in low-income communities.
EPA Administrator Lee Zeldin has accused the program of being a vehicle for federal agencies to “shovel boat loads of cash to far-left activist groups,” while the agency faces scrutiny over its legal authority to withhold grant money without substantiated fraud claims.
Of the eight grant recipients, five confirmed to PMG's E&E News on Friday that they remain unable to access the balance of their grants stored at Citibank, with no explanation from either the bank or the Trump administration. The remaining three organizations did not respond to inquiries but are presumed to be experiencing similar issues.
One awardee conveyed to E&E News that without access to funds, it cannot meet payroll obligations and anticipates defaulting on contracts with project partners by March 7 as it seeks to raise funds to cover expenses.
While other recipients—particularly established nonprofits with more resources—can temporarily manage their fundamental costs, all five groups indicated that an extended funding freeze could result in bankruptcies and defaults.
These nonprofits utilize the Greenhouse Gas Reduction Fund money, established by Biden’s Inflation Reduction Act, to provide loans for initiatives like solar panel installations and electric buses. However, some of their borrowers are halting projects or reevaluating their involvement, concerned that the grantees may not fulfill their lending commitments.
"Our borrowers need to be able to access funds to be able to move these projects forward, and that hangs in the balance right now if this continues,” said an official for one of the awardees, who requested anonymity due to fears of retaliation.
The EPA did not respond to requests for comment.
The head of one grant recipient, the coalition of nonprofits known as Power Forward Communities, expressed confidence in deploying its initial $539 million disbursement and believes that Citibank will honor the funding agreements. Citibank has yet to comment.
According to Citibank's contract with the recipients, the bank cannot freeze accounts for more than 48 hours unless the EPA initiates the procedure to reclaim exclusive control, which is permissible solely in cases involving fraud, according to several awardees.
On Tuesday, Zeldin stated on Fox Business that retrieving the funds is "now being worked through between the Justice Department and Citibank."
The Washington Post reported that the FBI has interrogated EPA employees regarding the Greenhouse Gas Reduction Fund programs. However, the publication noted challenges faced by the office of Acting Deputy Attorney General Emil Bove in finding a career prosecutor willing to request a warrant for the funds. A U.S. magistrate judge in the District of Columbia reportedly denied one request for a seizure warrant.
The Department of Justice did not respond to inquiries.
Several awardees contend that only a lawsuit would compel Citibank to clarify its legal justification for withholding the funds, yet they remain hesitant to take legal action due to previous positive interactions with the bank.
On Wednesday, Democratic California Attorney General Rob Bonta dispatched a letter to Citibank urging the release of the funds, as reported by two awardees. His office has not provided a response. Awardees anticipate that other Democratic attorneys general and governors will follow suit with letters of their own shortly.
In addition, awardees are reaching out to allies in Congress, including Republicans whose constituents stand to benefit from the investments under the program. Analyses indicate that more funding has flowed to red states and districts compared to blue ones.
Last week, the bipartisan National Governors Association proposed a resolution calling for “ensuring the federal government meets its already committed obligations for federally funded projects across states, territories and Commonwealths.”
Awardees have expressed that the uncertainty regarding Citibank’s hold on the funds complicates pursuing legal recourse. "It’s hard to know what the legal options are when we don’t know what actions were taken,” commented an official for one awardee.
Some awardees are contemplating legal action against the bank, aiming to prompt it to release the funds and disclose its interactions with the EPA and Justice Department.
Others prefer to remain passive for the moment. Zeldin and some Republican lawmakers have primarily targeted the three recipients of a segment of the $20 billion program, specifically the $14 billion National Clean Investment Fund. Meanwhile, awardees under a smaller initiative intended for nonprofit lenders serving low-income communities are wary of attracting attention.
“We’ve been operating in a gray zone,” remarked an official for one of these organizations. “We haven’t been targeted and [are] trying to keep a low profile.”
Tim Cama contributed to this report.
Debra A Smith contributed to this report for TROIB News
